NegligenceExclusion clause - fire at customer's premises caused by negligent installation of equipment by electrical supplier - exclusion of liability for economic loss limited to supply not installationA E Beckett & Sons (Lyndons) Ltd and Others v Midlands Electricity Plc: CA (Lord Phillips of Worth Matravers MR, May and Laws LJJ): 8 December 2000The three claimants owned and operated an egg production and egg-packing business.

The defendant supplied electricity to those premises and installed equipment which caught fire, causing serious damage to both premises.

The claimants brought an action against the defendant claiming damages in negligence.The claims of the second and third claimants, the operators of the businesses, largely related to economic losses allegedly resulting from the interruption of their businesses.

At a trial of preliminary issues the judge held that the fire was caused by the defendant's negligence and that the defendant was liable in damages to each of the claimants, which was not challenged on appeal, but that the defendant had excluded its liability for economic loss to the second and third claimants by a clause excluding liability for economic loss resulting from negligence in respect of the supply of electricity.

The second and third claimants appealed.Robert Moxon Browne QC and Graham Eklund (instructed by Berrymans Lace Mawer) for the claimants.

Justin Fenwick QC and Leigh-Ann Mulcahy (instructed by Rowe & Mawe) for the defendant.Held, allowing the appeal, that the relationship between an electricity supplier and a customer was not contractual but governed by the Electricity Act 1989; that the exclusion clause in the defendant's conditions of supply, which was co-extensive with s.21 of the 1989 Act, permitted exclusion of liability in negligence for economic loss resulting from the interruption or variation of the supply of electricity but that exclusion did not extend to the negligent installation of plant.

(WLR)